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    baberin's Avatar
    baberin Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Dec 30, 2011, 09:57 PM
    Inheritance tax
    My sister and her spouse just lost their single 40 year old daughter, W/no children. She left them approximately 225,000 each from a life insurance policy. She still owed around 80,000. On her home, and owned her car. She had no other assets. They live in California, will they have to pay a lot of inheritance tax.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #2

    Dec 30, 2011, 11:01 PM
    There is no federal inheritance tax. CA also does not have inheritance tax.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #3

    Dec 31, 2011, 03:39 PM
    Also, payments to beneficiaries from a life insurance policy is normally NOT subject to income taxes.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
    		  
    #4

    Dec 31, 2011, 03:57 PM
    Even more important, benefits from a life insurance policy are not part of the deceased's estate. So, whatever she owed does not affect the payout from the life insurance.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #5

    Dec 31, 2011, 04:13 PM
    Good point, Scott!
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